Volkswagen’s CEO Just Went Off on Tesla–and Taught a Major Lesson in How Not to Lead – Inc.com

Müller recently participated in a conference in Germany, the theme of which was “the future of the automobile industry.”At one point, Müller felt motivated to attack Tesla Motors, and his comments have sparked some heated discussion in Germany.

Here’s an excerpt in English (you can find the original video–in German–below):

Now I really have to say one more thing about Tesla. With all due respect, there are some people who are masters at making promises–I won’t name any names … There are companies that barely sell 80,000 cars per year. Then there are companies like Volkswagen, selling 11 million cars this year, making a profit of 13 or 14 billion euros a year. And if I’m correctly informed, Tesla destroys millions of dollars in the triple digits every quarter, firing employees for whatever reason. So, social responsibility–yeah, I don’t know about that. So, I’m begging you: Let’s not get carried away, nor compare apples with oranges.

Critics of Tesla will say Müller makes some valid points–Musk has developed a reputation for not always delivering on his promises, and Tesla has certainly burned through its fair share of cash over the years.

But the executive’s comments remind us of his company’s biggest problem:

Volkswagen keeps getting distracted by envy.

Lessons (not) learned.

You’ve probably heard all about Dieselgate, the now infamous Volkswagen emissions scandal that came to light in 2015. In its relentless drive to become the world’s number one automaker, Volkswagen was caught red-handed engaging in one of the greatest frauds in history: It equipped millions of its supposedly “clean-diesel” cars with “defeat devices”–software that that turned on emission controls only when the car was being tested in a lab. (On the road, cars were emitting five to 35 times as many pollutants as allowed by law.)

Since Volkswagen’s tower of deceit came crumbling down, the company has pleaded guilty to civil and criminal charges, and has paid billions of dollars in fines.

Both employees and outside analysts blamed the management culture for enabling this sort of deliberate and wide-spread deception. In an investigative piece published after the scandal, The New York Timesdescribed Volkswagen’s culture as “confident, cutthroat and insular … a place where subordinates were fearful of contradicting their superiors and were afraid to admit failure.”

What spurred this type of attitude?

I believe Volkswagen executives suffered from what could be referred to as “the envy animal.”

Envy is that negative feeling, that bitter resentment that comes when you want something someone else has. I compare it to a vicious animal living inside you because it threatens to eat you up by distracting you from your focus–if you continue to feed it.

To illustrate, consider the wildly ambitious goal Volkswagen set back in 2007: to dethrone Toyota and become the world’s number one automaker–by 2018.

The major problem with that goal?

It was completely based on envy.

Volkswagen’s goals should have been internally focused. Company leadership could have concentrated on:

building integrity into the company’s DNA;

keeping employees engaged and happy, instead of intimidated; and

making the best quality cars possible

By doing this, VW would have been working to become the absolute best version of itself.

Instead, company leaders unleashed the envy animal. Distracted by blind ambition, they did whatever it took to reach their goal, regardless of who got hurt in the process.

Müller, who took over as CEO shortly after the scandal broke, promised VW would learn from its mistakes. Just last year, he pledged the company would “do everything we can to win back trust,” outlining plans for “a new, better Volkswagen.”

But promises don’t mean much without actions to back them up. With this recent attack, Müller seems to be losing focus again. Why did he feel the need to take an extra dig at Tesla? Why is he offended by the praise others have for the admittedly much smaller company? Does he feel threatened? If so, what does that mean as VW moves into the future?

But to truly enact change at VW, Müller and his team must stop comparing themselves to their competitors–at Toyota, Tesla, or anywhere else. If they want to learn from other automakers or industry leaders, that’s great; but they must be willing to starve the envy animal.

Instead, they should work to establish what’s most important for the company moving forward, and learn to focus.

If they can’t take that lesson to heart, then Volkswagen is doomed to repeat its mistakes.